Archive for April 2016

Above: The Mitsubishi eK Wagon, one of the cars at the centre of the company’s latest scandal.

One thing about creating and running Autocade is that you gain an appreciation for corporate history. Recently, I blogged about Fiat, and the troubles the company is in; it wasnât that long ago that Fiat was the designersâ darling, the company known for creating incredibly stylish vehicles for all its brands and showing how you could use Italian flair to generate sales.
That was the 1990s; by the turn of the century, Fiat had lost some of its mojo, and by the time I got to Milano in the early 2000s, the taxi ranks had plenty of German and French cars. Once upon a time, they would have been nearly exclusively Italian. Today, a lot of Fiatâs range is either made by, or on platforms shared with, Ford, GM, Chrysler (which it now owns), Peugeot, Mitsubishi and Mazda. Sharing platforms isnât a sin, but a necessity, but Fiat seems to have taken it to a new level, looking like a OEM brand whose logo is freely slapped on othersâ products.
Mitsubishi is the other car company to find itself in trouble in recent weeks. The company admitted that it had lied about the fuel economy figures for its kei cars, the micro-cars that it sells predominantly in Japan.
It wasnât as troublesome as Volkswagenâs defeat device which fooled the US EPA, running differently when it knew the engine was being tested. Mitsubishi kept things simple, and overinflated tyre pressures.
It would have got away with it, too, if it werenât for Nissan, a company to which Mitsubishi supplied, under an OEM deal, kei cars. The customer started to ask questions and tested the cars for itself.
Mitsubishi had supplied 468,000 cars to Nissan, all of which are affected. It had only sold 157,000 under its own marque. Production of the cars, from the eK range, and the OEM equivalent for Nissan, the Dayz, is now suspended, while Mitsubishiâs shares plunged 15 per cent on the news last week.Sankei, the Japanese newspaper, believes that Mitsubishi used the wrong test method on the I-MIEV electric car, RVR (ASX), Outlander, and Pajero, which are exported.
You have to wonder what the corporate culture must be like for these matters to recur so regularly. But then, collectively, people tend to forget very rapidly, and companies like Volkswagen and Mitsubishi must bank on these.
VW isnât the first to cheat the EPAâUS car makers have attempted less sophisticated defeat devices in the latter half of the 20th centuryâthough it has had a chequered past. Just over 10 years ago, there was a scandal involving VW colluding with a union leader to keep wage demands down, and a few low-level employees took the rap. Go back to the 1980s and the company found itself in a foreign exchange scandal. But these were known mainly among specialist circles, principally those following car industry news.
Mitsubishiâs scandals, meanwhile, were more severe in terms of the headlines generated. Last decade, when the media called Mitsubishi Japanâs fourth-largest car makerâthese days they call it the sixthâthe company was implicated in a cover-up over the safety of its vehicles. Japanese authorities raided the company in 2004, and revealed that Mitsubishi Motors Corp. hid defects that affected 800,000 vehicles, and had done so since 1977. Nearly a million vehicles were recalled. Affected vehicles were sold domestically as well as in Europe and Asia. Top execs were arrested that time, including the company president, although it was hard under Japanese law to punish Mitsubishi severely. There was no disincentive to conducting business as usual. The company was ultimately bailed out by its parent, the giant Mitsubishi Group, when it found itself facing potential bankruptcy.
People were killed as a result of Mitsubishiâs cover-ups, and at the time it was considered one of the biggest corporate scandals in Japan.
Go back a bit further and Mitsubishi Materials Corp., a related company, had used slave labour in World War II, including US troopsâsomething the company did not apologize for till 2015, even though the Japanese government itself had issued apologies in 2009 and 2010. While it was a first among Japanese corporations, and US POWs got what they had long awaited, descendants of Chinese slave labourers still have a lawsuit pending against a connected Mitsubishi subsidiary.
The other major difference between Volkswagen and Mitsubishi is that the Japanese marque is relatively weak in terms of covering its market segments. Itâs SUV- and truck-heavy, and its kei cars had sold well (till now), but it has little in the passenger car segments, which it had once fielded strongly. The Mirage (and the booted Attrage) and the Galant Fortis (exported as the Lancer to many markets) are whatâs left: the latter is now nine years old, though still fairly competitive, and in desperate need of replacement. Its only other car is its Taiwan-only Colt Plus, still selling there as an entry-level model despite having been withdrawn from every other market. In the big-car segments, Mitsubishi is actually supplied by Nissan in Japan, but doesnât make its own any more. âSixth-largestâ is shorthand for third-smallest, at least among the big Japanese car companies.
Mitsubishi looks set to quit the C-segment (Galant Fortis) since neither Renault nor Nissan, which it had approached, wanted a tie-up. And the company survives on tie-ups for economies of scale, and thereâs now a big question mark over whether potential partners want to work with it. Automotive Newsâs Hans Greimel questions whether the MitsubishiâFiat truck deal will go ahead (though I had thought it was an inked fait accompli).
But, most seriously, Mitsubishi hasnât completely recovered from its earlier scandal.
It is within living memory, and the timing and nature of the latest one, tying so closely to what rocked Volkswagen, ensured that it would get global press again, even if the bulk of the affected cars were only sold domestically. And when consumers see a pattern, they begin wondering if thereâs a toxic corporate culture at play here.
Weâre too connected in 2016 not to know, and while Mitsubishi is likely to be bailed out again, it will face the prospect of shrinking car salesâand sooner or later one will have to question whether the company will stay in the passenger-car business. Isuzu exited in the 1990s, focusing on SUVs, pick-ups and heavy trucks, forced by an economic downturn. Since Mitsubishiâs own portfolio is looking similarly weighted, it wouldnât surprise me if it chose to follow suit, its brand too tarnished, with too little brand equity, to continue.

As one of HM the Queen’s loyal and humble servants, I wish her a happy 90th birthday and include this YouTube video of one of her most memorable moments of recent times. A bit of the ‘Dambusters March’ can’t go wrong, either. It shows the Queen to have a particularly good sense of humour.

Above: Facebook’s latest move: ensuring that notifications for messages go to its own app. If you choose not to install it, tough. (Actually, you can reach your messages if you had bookmarked your old message index, and through some digging you can still get there. However, your old habit of clicking on the number won’t work any more.)

I notice that Facebook has dropped to third in Alexa this week, but none of the tech press has covered it.
I know the usual arguments: Alexa isn’t the best way of measuring audience stats; everyone (including us) has dropped because of the way Firefox has changed its status bar, thereby omitting a lot of users from its sample; Facebook itself will have recorded no real drop in user numbers (though we also know a lot of these so-called active users are bots and spammers, as we see heaps each day); and that Alexa doesn’t capture mobile data, where people are spending far more time these days.
It does seem rather hypocritical, however, given that the same tech press applauded and wrote heaps of articles when Facebook overtook Google in Alexa. Some hailed it as the rise and rise of Facebook. There were tones of how unassailable it had become.
However, its number-one position was remarkably fleeting and it quickly dropped back to second, where it has been for years, apart from that one blip.
Facebook’s position has been usurped by Google’s YouTube. I make no predictions on whether this is fleeting or not, but it doesn’t look good for Facebook. I just don’t see any YouTube hate out there. If you dislike reading the comments from the world’s keyboard warriors sitting in their underwear at home, a few cookie settings will render them invisible. YouTube becomes a remarkably tolerable site.
Earlier this month, a report found by my friend William Shepherd showed that personal sharing on Facebook had dipped by 21 per cent.
I have said for years that ‘Facebook is the new Digg,’ a place where news is shared, not personal updates, though it appears it has taken a while for the company to realize this. Looking at some of the bugs on the site over the years, I’m not surprised Facebook missed it: for months it acted as though its entire user base was in California, with the website stuck at the end of each month till it got to the 1st in its home state. Now it is kicking users off over fake malware accusations when it’s more likely, and this is my guess based on how the site has behaved over the years, that its databases are dying. Liking, sharing and commenting fail from time to time.
Given this, and its many other problemsâincluding the breach of policies outlined by some of the groups it participates in, impacting on user privacyâno wonder it’s experiencing this drop.
I see personal updates again that I saw a day before, because relatively few of my 2,300 friends write them any more. The trend has shifted, and a lot of users must have noticed what I did many years ago.
At Medinge Group we have long advocated transparency in brands, and Facebook’s actions run counter to a lot of what we have proposed.
We believe that sooner or later, people wise upâsomething we said about Enron at one of the first meetings I attended in 2002.
In fact, the way Facebook behaves tends to be combative, and for a 21st-century firm, its attitudes toward its user base is very 20th-century, a “them and us” model. It’s not alone in this: I’ve levelled similar accusations against Google and I stand by them. Since my own battle with them over malware, and a more recent one over intellectual property (where I was talking to a Facebook employee who eventually gave up when things got into the “too hard” basket), I’ve found dozens of other users via Twitter who have been kicked off the service, yet are running clean, malware-free machines. The blog post I wrote on the subject has been the most-read of the pieces I have authored in 2016, and certainly the most commented, as others face the same issue.
While both giants will claim that they could not possibly have the sort of one-to-one relationship with their user bases in the same way as a small business can, it’s clear to me that big issues aren’t being flagged and dealt with at Facebook. When I read the link Bill sent me, my first reaction was, ‘Why did it take so long for someone there to realize this?’
Let’s not even get started on the way both companies treat paying their fair share of tax.
It’s not about the number of people experiencing any given issue, it’s about the severity of the issue that a small number of people experience. By the time a larger vocal minority experiences it, the damage has gone a lot further.
Facebook does listen to some of these cases: I remember when it limited bot reports to 40â50 a day, at a time when it was not uncommon to find hundreds a day on the site. I complained, and after a few months, Facebook did indeed remove this limit.
But I regard that as an exception.
Its forced downloads of so-called malware scans that even its supplier refuses to answer for (could they have nefarious purposes?), and now the latest last weekâensuring that all message notifications in a mobile browser link to its Messenger app, resulting in a 404 for anyone who does not have it installedâare rendering the website less and less useful. In my case, I just use it less. We’re not going to download privacy-invading apps on our phoneâwe’re busy enough. We want to manage our time and if that means we only get to Facebook messages when we are at our desks, then so be it. Some might abandon it altogether.
Its other move is ceasing the forwarding from www.facebook.com to m.facebook.com on mobile devices, so if you had the former bookmarked, you’re not going to see anything any more. Some browsers (like Dolphin) came with the former bookmarked. Result: a few more legit users, who might not know the difference, gone.If there’s no trust, then regardless of the money you have, you’re not a top brand, nor one that people really wish to associate with.
Facebook, of course, knows some of this, which is why it has bought so many other firms where there’s still personal sharing, such as Instagram and Whatsapp.
It knows if there’s another site that comes along that gets public support, as it did when it first started, people will abandon Facebook en masse.
Curiously, even this past week alone, it seems intent to hurry them along. There must be some sort of corporate goal to see if it can reach fourth, just like Flight of the Conchords.

As he has done so many other times since we encountered each other in 2001, Simon Anholt has articulated my thoughts on governance and politics much better than I can through his ventures. I think this puts a very good context on why I ran my mayoral campaigns the way I did, and for that matter, a good deal of my own businesses. The ideas here are in line with what we believe at Medinge Group, tooâmore on that in an upcoming post. We live in a connected, globalized planetâand the sooner our leaders wake up to this fact, and the positive potential it brings, the better.
How can we better organize ourselves as seven thousand million people? My belief has been: if we can start at a city level, we can bring about change.